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The Bank of England and the Federal Deposit Insurance Corporation will on Monday outline emergency resolution plans for the 12 “global systemically important financial institutions” based in the UK and the US, marking the first such cross-border initiative by regulators to propose a framework for dealing with a potential failure of a large bank.

Writing a joint strategy paper in the Financial Times, BoE deputy governor Paul Tucker and FDIC chairman Martin Gruenberg propose that shareholders of G-Sifis will likely be wiped out and the claims of unsecured bondholders be marked down to “reflect any losses that shareholders cannot cover”.

In order to ensure adequate capital reserves in the banks’ headquarters to avoid a potential taxpayer bailout, the two regulators will also seek to force big US and UK banks to hold “sufficient” debt and equity at the top of their group holding structures, according to the document.